The class divide isn't based around an arbitrary salary, or specific job positions. It's whether you have hire/fire powers and you make money off of other people's labour, rather than selling your own. Hollywood actors and famous football players are often very rich, but they sell their labor to get by. They don't own the means of production
> Hollywood actors and famous football players are often very rich, but they sell their labor to get by.
But there's a key difference. They don't need to continue to sell their labor, they can stop at any time and live on e.g. income from dividends. Or maybe they have enough cash they could literally not even invest it and still live fine.
Although they may not own the means of production right at this moment, they easily could at any moment, it's a choice.
Ironically it's more often governments that interfere with this. Go to the library and read some books and you can learn how to be a plumber or an electrician, buy a toolbox and you're on your way. Presumably there is some kind of licensing exam?
No, first you've got to find an existing tradesperson and apprentice under them, even if you could already pass the exam on your own. For a few weeks is it? Years, typically. To become a journeyman. Still can't work for yourself, now you have to work under them for a few more years.
Figure out how to file papers for an LLC. Maybe you need a lawyer. Tax accounting will be fun too. Do any of the cities you operate in have a different sales tax rate? Which of your business expenses can be deducted in the current year and which have to be depreciated? Is that the same for things you resell?
Guess what happens if you want to move to another state.
More regulations as determined with a tape measure across the law library, sure. Each rule is another cost of entering the market.
The hard part is how to take a scalpel to them. Okay, 95% of them are inefficient, granted. Which 95%? You don't want the government to ban tall buildings or adversarial interoperability or to subsidize corn syrup or prohibit farmers from selling their crops or the Jones Act or rent control or de facto caps on the supply of doctors or certificate of need laws or taxi medallions. But you probably want the government to ban leaded gasoline.
So how do you get them to do the few narrow things they need to do but not all the rest of it?
A hammer is a poor example of the means of production now that they're so easy to come by. The chokepoint is elsewhere.
A more relevant example would be influence over the information that people consult when they're deciding which carpenter to hire. You need both a hammer and a place to swing it that gets you paid--and nobody is trying to restrict access to hammers to protect their position.
This is why many of our most valuable companies are ad companies--you operate at a disadvantage unless you give them a cut of your profits.
In your example the means of production is an advertisement? How would the worker own the means of production? Hammer and newspaper? Or hammer and all the newspapers?
> if you want to own the means of production that happens to be a viable livelihood
If the means of production is now a livelihood, I have to say that this is a great example of how "means of production" is an insufficiently-precise phrase. It means all things to all people.
Marx seeing his mate's factory and thinking "it'd be nice if the workers owned that" and coming up with a generic-sounding equivalent phrase isn't really good enough to define a real concept.
Which is why people who use the phrase "means of production" seem to all mean different things. Owning a hammer is owning the means of production. It's just the means of production isn't enough.
I do agree that "means of production" is quite vague and too varied. But still, from a practical perspective, if the phrase is to have any meaning at all, I'd say that it would be enabling some form of "production" to be done by whoever owns that thing.
In a carpenter's hand, a hammer is a mean of production. Whereas owned by someone incapable of producing what can be considered work of carpentry, it wouldn't be.
If the phrase refers to literally a tool which that can be used by some arbitrary somebody --- not necessarily the owner --- to produce something, then we're all in possession of "means of production", by simply having a body with basic I/O, which enables us to be a freelance CEO.
I find that to not be a very practical definition, and probably not the meaning used by whom your first reply was directed to.
Means of production, for Marx, means any instrument which builds something other than the user who uses it. If I use a walking stick to walk, it is not means of production because the object is building my ability to move. Neither if I use a house for living. But if the house is mine and I rent it, then it is not building my subsistence, it is building rent.
Even Marx agreed that people have access to some means of production: the carpenter owns the hammer. However, after capitalist development, the major means of productions that produce the majority of wealth (like the industries that produce most GDP for a country) are indeed outside the reach of most people and this creates a division between people who gets money because they labor and people who gets money because they own capital and relevant means of production.
> However, after capitalist development, the major means of productions that produce the majority of wealth (like the industries that produce most GDP for a country) are indeed outside the reach of most people and this creates a division between people who gets money because they labor and people who gets money because they own capital and relevant means of production
I'm always fascinated by this sort of thing. What do you mean "after capitalist development"? Do you think once upon a time people owned factories together, and capitalism came along and stopped all that?
Of course not. Factories are a product of capitalist development. But this monopoly of means of production is a necessity for capitalism, because without it, there is no salaried work. Therefore, we had things like the enclosure of communal lands in Europe that were instrumental for deprieving people of means of production.
Why do you think that in American continent we had slave labor? How do you convince someone to work in your land if the person is able to simply go and easily take for herself vacant land and produce for herself instead of producing for someone else and get a salary smaller than her production? Slavery was how you deal with the problem forcing people to work. Later (and usually before the enslaved people are freed), the land becomes a commodity and then nobody can so easily simply take land for herself.
It's whether you have hire/fire powers and you make money off of other people's labour
I think creating a hierarchy of managers and workers is just another tool that the people with power use to control everyone else.
Surely my direct manager has more in common with me than the CEO? Am I wrong to think this? Wouldn't the CEO see both managers and their teams as mere workers?
100% correct. That was the gist of my original point. In Corporate America, unless you're in the C-suite or sitting on the board, you're not in the club. The corporate ladder makes it seem as though the middle management levels are on the path to being upper class, but they're in the same position as everyone else. They just drive a nicer car while doing so.
Technically CEOs are also working class, since they mostly live off of their salary. A lot of this is voluntary, since with a bit less spending I'd imagine most BigCo CEOs could easily cope on capital income from the investments their salaries have afforded them. I wonder how that affects their classification...
I see the divide as being between those of us who created wealth by working vs. those who do not create wealth and instead play zero sum and negative sum games.
You could have someone who is solidly in the investment class and only works three hours a year, but during those three hours they tell their pet executives to put the capital into energy storage tech and new housing construction and do a lot of good in the world.
You could have a low-level white collar worker who isn't making very much money at all, all of it in wages, who decides to screw over the company's customers with something economically inefficient because it gives them some advantage in internal corporate politics.
> You could have someone who is solidly in the investment class and only works three hours a year, but during those three hours they tell their pet executives to put the capital into energy storage tech and new housing construction and do a lot of good in the world.
If they're making skilled capital-allocation decisions that most people couldn't, that's work. If they're being charitable in the allocation of their ill-gotten gains, that doesn't make them any less ill-gotten.
Rentiers inherently make their money in a zero-sum way; it's perhaps not the only way to be zero-sum, but it is a major one.
> If they're making skilled capital-allocation decisions that most people couldn't, that's work. If they're being charitable in the allocation of their ill-gotten gains, that doesn't make them any less ill-gotten.
Why do they have to be ill-gotten gains? Someone could invest money they've earned through productive work.
And could invest it in something charitably while still making money, e.g. you have the option to make 10% doing something anti-social or 5% doing something socially beneficial and you consciously choose the latter knowing you could make more by being less charitable.
> Rentiers inherently make their money in a zero-sum way; it's perhaps not the only way to be zero-sum, but it is a major one.
Do they? Suppose you have some money and you put it in some investment fund and then live off the earnings while having no real involvement with how the fund is managed. Meanwhile the businesses you invested in are off doing productive net-positive things with your money that wouldn't have been possible had you stuffed it in your mattress, while yielding you a positive return which is nonetheless smaller than the total amount of net good created by the business.
The best you can say is that the returns are zero-sum, even if the act of investing is positive sum. But isn't that true of anything? If you get a raise, that's zero sum. Someone else would have had the money in the alternative.
> Why do they have to be ill-gotten gains? Someone could invest money they've earned through productive work.
Because your hypothetical was specifically about someone who doesn't do productive work?
> Suppose you have some money and you put it in some investment fund and then live off the earnings while having no real involvement with how the fund is managed. Meanwhile the businesses you invested in are off doing productive net-positive things with your money that wouldn't have been possible had you stuffed it in your mattress, while yielding you a positive return which is nonetheless smaller than the total amount of net good created by the business.
You're begging the question - why was it your money in the first place?
If it's value you've produced, yes you can partner with someone else to compound it. But if it's just privilege that you had, then you don't get any credit for allowing it to be used productively.
> The best you can say is that the returns are zero-sum, even if the act of investing is positive sum. But isn't that true of anything? If you get a raise, that's zero sum. Someone else would have had the money in the alternative.
If you do something that produces real value in the world then that's positive sum - if you turn some planks and nails into a table, that table is more valuable than the stuff that went into it, the world is better off.
> Because your hypothetical was specifically about someone who doesn't do productive work?
That's anybody who has enough money that they don't have to work. It doesn't tell you anything about where they got it.
> You're begging the question - why was it your money in the first place?
What if you found it in the street? Would that affect whether or not the business you invest it in produces a net positive as a result?
> But if it's just privilege that you had, then you don't get any credit for allowing it to be used productively.
That doesn't seem right. You could have spent it on drugs and sex. Your choices matter.
> If you do something that produces real value in the world then that's positive sum - if you turn some planks and nails into a table, that table is more valuable than the stuff that went into it, the world is better off.
Suppose the planks are the status quo. You're getting paid $10/hour to make tables. Now you get a raise and get paid $12/hour to make tables, but you still only make exactly the same number of exactly the same tables as you did for $10/hour. The extra $2/hour is zero sum, isn't it? Why should you get it instead of the boss or the customer?
> What if you found it in the street? Would that affect whether or not the business you invest it in produces a net positive as a result?
Does finding a large amount of money in the street make someone more deserving that someone who found a smaller amount of money in the street?
> That doesn't seem right. You could have spent it on drugs and sex. Your choices matter.
So you put part of it back into circulation and kept the rest for yourself. You're still not doing any better than morally neutral.
> Suppose the planks are the status quo. You're getting paid $10/hour to make tables. Now you get a raise and get paid $12/hour to make tables, but you still only make exactly the same number of exactly the same tables as you did for $10/hour. The extra $2/hour is zero sum, isn't it?
Well where did the value that it corresponds to come from? (I assume you're not just talking about inflation, or labour being scarcer or anything like that - but in that case the raise won't have come from nowhere). If you're making better or more tables through your own skill, you've earned it. If the boss has made production work better or got better machines or something, maybe he's earned it. If it was previously just economic rent that the boss was extracting then yes it's zero sum because it was zero sum to start with.
> Does finding a large amount of money in the street make someone more deserving that someone who found a smaller amount of money in the street?
Does being tall make someone more deserving of a basketball scholarship than someone born with different genetics?
> So you put part of it back into circulation and kept the rest for yourself. You're still not doing any better than morally neutral.
You're not giving it away, you're exchanging it for something that you consume. You're causing some chemist to make recreational drugs instead of medicine, or causing someone to do sex work when you could have paid someone to build housing. That's not morally neutral.
> Well where did the value that it corresponds to come from? (I assume you're not just talking about inflation, or labour being scarcer or anything like that - but in that case the raise won't have come from nowhere).
Inflation is boring because then the real value would be the same. Labor being scarcer, on the other hand, is a perfect example. Some new large employer moves into town and your boss gives you a raise rather than see you quit and have to pay retraining costs for someone they'd still have to pay the extra $2 to. You haven't done anything different, why do you "deserve" any more money?
> If it was previously just economic rent that the boss was extracting then yes it's zero sum because it was zero sum to start with.
Suppose the boss was getting it, but as compensation for labor rather than economic rent. The boss found a source for the wood and lined up customers and all of that but now has to pay you more out of his own pocket because local labor demand increased while demand for tables is the same because they're sold into a national market.
And yet, even by paying you the extra $2, the boss is still receiving a net benefit from operating the business, as were you when you were working for the original wage. Changing the amount is zero sum, but the activity it's compensating isn't, so how do you want to call it?
> Does being tall make someone more deserving of a basketball scholarship than someone born with different genetics?
If being taller leads to better basketball that more people will enjoy watching, yes. I'm not convinced that sports leagues aren't a zero-sum blight, but certainly someone whose fortunate genetics mean they're genuinely producing more for society (e.g. a stronger porter who carries more stuff further, or a more intelligent scientist who does better research, or a singer with a beautiful voice who is more rewarding to listen to) deserves to reap at least some of the fruits of that.
> Labor being scarcer, on the other hand, is a perfect example. Some new large employer moves into town and your boss gives you a raise rather than see you quit and have to pay retraining costs for someone they'd still have to pay the extra $2 to. You haven't done anything different, why do you "deserve" any more money?
Because what you're doing - and it's something you're actually doing, not something you happen to be holding - is worth more. The price of labour is going up because the amount of real-world value produced per hour of labour is going up.
> And yet, even by paying you the extra $2, the boss is still receiving a net benefit from operating the business, as were you when you were working for the original wage. Changing the amount is zero sum, but the activity it's compensating isn't, so how do you want to call it?
Either the value produced is being divided fairly among those who are producing it, or it isn't. Someone who is producing value might certainly be getting paid more (or more commonly less) than they are fairly earning, and that part is zero-sum. But if someone isn't producing value, then necessarily all of their income is from the zero-sum part.
(Obviously if we zoom in on the details there's a spectrum - some labourers earn more than they should through rentiering aspects, and even those who live large off of economic rents are likely doing some minimal amount of productive labour. But I suspect the distribution is pretty bimodal)
Yes and no. The lines get blurry when you’re looking at doctors/plumbers/etc that own their practice. They are making money from their labor but they can also sell their company to someone else.
Major actors are really leveraging a brand not just selling their labor. Athletes have a similar dynamic where the very best compensated are making more from endorsements than playing football. And of course the richest examples all end up investing well.
They literally own the means of production, their bodies and minds. No one is forcing them to sign contracts for a million dollar salary, they can do the exact same acting/athelete-ing with a $100 smartphone.
Relax AI are now in the verge of evening the playing field for actors. Athletes not yet, unless we have AI starting to generate completely made up sporting events.
The later is extremely possible given how much data there is and how similar it all is.
A fair while back I was actually reading about a proposed system for literally CGI/virtual horse racing specifically for gambling purposes, backed by gambling industry money.
Unsure if it ever went anywhere, I kind of mentally filed it as “insane gambling nonsense”.
But the paying audience is got there through TV rights, TV building, comms infrastructure, stadium building and maintenance, ticketing services, etc etc. The footballer by himself has no paying job.
And so much of our society is bound by who you work for: medical insurance, social standing, etc.
And so many people just don't understand that there's really 4 classes: poverty, able to live, owner/landlord, royalty. (The USA has the politician class in place of royalty.)
Note I didn't say "middle class". That term originally was the constructed 'rich merchant non-royalty" class that was founded out of mercantilism into capitalism. The Middle Class is now the landlord and managerial class for most of the western countries.
But back to the topic, a Starbucks worker, a IT worker, a sex worker, and a MD all must sell their time and body to live. It's only when you start buying others labor/property cheaply and selling it expensively do you become a capitalist. Anything else, and youre just in the labor class.
The problem with this simplification is that it ignores risk. Being an employee means you get paid, and can change job it the business fails. Bring an owner/investor means you might lose all your money if the business fails. That is massive risk, and entirely ignored by the above characterisation.
The same apartments are getting 10 year tax abatements, because they are "good for business" aka trickle-down.
During the pandemic, pandemic "loans" were given to hundreds of businesses in the local area. And those loans were turned into grants (not have to pay back).
And landlords are usually smaller, but again, they're another reason why housing is stupid priced: it's common to see a rental of a home priced at mortgage+30% . The landlord gets their principal covered, keeps the property, and raises costs for everyone.
None of these apply to me or my family, sans the whole big $1200 relief check. I have no tax abatements, and pay taxes in full every paycheck and when I buy stuff. And local governments usually allow whatever by companies unless there's a big fuss. And, those corporate promises about hiring people or bringing in business? Yeah, not actually enforced.
And I didn't even discuss "too big to fail", fed govt propping up industries, and the like.
> The same apartments are getting 10 year tax abatements, because they are "good for business" aka trickle-down.
This promotes new construction. Not as well as zoning reform, but it does. Which lowers the rent (or at least makes it go up less fast).
> And landlords are usually smaller, but again, they're another reason why housing is stupid priced: it's common to see a rental of a home priced at mortgage+30% .
Well of course they are. The landlord is taking on the maintenance of the property, insurance, the risk of a housing crash (look at housing prices FFS), the risk of a vacancy or destructive or non-paying tenant, legal expenses associated with operating a business etc. And on top of that, they have to pay the mortgage.
They do turn a profit, because of course they do, why else would they do it? And with that they slowly buy the property from the bank, at which point the interest on the value of the property goes to the landlord instead of the bank, the same as it would if they sold the property and invested the money in something else.
The problem with landlords is not that they turn a profit -- they always will or they'd sell the property instead.
It's that they lobby for zoning restrictions that limit the housing supply to increase rents. But homeowners do the same thing, to the detriment of both renters and prospective homeowners.
Mortgage is not a cost accounting wise. Interest is a cost, but capital repayment is already "profit" which the landlord will keep at the end of the loan.
Let's say rent is mortgage + 30%. If we assume all the risks and costs (maintenance, insurance, etc) are eating up all of that 30%, they still make a whopping 200%+ profit in the long run.
In a fair business relation with 20-30% profit, the landlord would actually loose cash each month until the mortgage is over, with the expectation to realize profit when the property is sold. This rarely happens.
> Mortgage is not a cost accounting wise. Interest is a cost, but capital repayment is already "profit" which the landlord will keep at the end of the loan.
Only a small sliver of the first mortgage payment is principal. Most of it is interest and the escrow for the property tax and insurance. By the last mortgage payment most of the interest has been replaced with principal, because by then the landlord is the one who owns the property instead of the bank, so now they get what used to be the interest. The property tax and insurance payments never go away, they just stop going through the bank.
The question you have to ask if you think they're overcharging is, why don't more people do it? If it got higher returns than other investments, why wouldn't people sell their stocks and buy real estate? The answer is that they do, until it doesn't anymore. And then it doesn't anymore, because the price of real estate goes up until investing in real estate no longer has above-market risk-adjusted returns.
We have pretty good numbers on this: Here's a common real estate ETF, it's basically "be a landlord, but as a stock", 10-year average return 5.49%:
